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New environmental regulations, coming amid warnings that Texas might not meet its electricity needs next summer, could set up a legal dilemma for regulators, grid operators and generators.

The Environmental Protection Agency's Cross-State Air Pollution Rule, which takes effect Sunday, requires plants in 28 states including Texas to cut smog- and soot-forming emissions that cross state lines.

Although they have beyond Sunday to come into compliance, power plant operators and their political supporters say the rule will force shutdowns of power plants needed to keep U.S. grid capacity safely above demand.

In Texas, they cite Dallas-based Luminant Generation Co., which says it will idle two coal-fired generating units to comply with the EPA rule.

The Energy Department says it has the legal authority under the Federal Power Act to require power plants to operate in emergencies to maintain grid reliability.

But U.S. Rep. Pete Olson, R-Sugar Land, said generating companies could be in an untenable position if the department orders operation of plants idled because of EPA rules: By complying with one of the federal agencies, they may defy the other one.

In the wake of ERCOT's forecast, Olson is drafting legislation he said clarifies that power plants wouldn't break environmental laws by complying with Energy Department orders.

He cited incidents over the past decade in California and Virginia, where Mirant Corp., now GenOn Energy Inc., was ordered to run generating units for reliability purposes, but faced legal action for environmental violations.

“It's not fair, when these companies do exactly what regulators ask them to do — keep the lights on — and then they're penalized for it,” Olson said in an interview.

Assistant Energy Secretary David Sandalow said recently that the Energy Department considers it a last resort to order plants to operate.

Gina McCarthy, an EPA assistant administrator, said the Clean Air Act, which authorizes the cross-state rule, never has caused reliability problems and has mechanisms to prevent local reliability issues.

Teresa Clemmer, associate director of the Vermont Law School's Environmental and Natural Resources Law Clinic, said the EPA can waive compliance for a facility and probably would do so in Texas if needed.

“I can't imagine in this instance the EPA wouldn't do the same thing,” Clemmer said.

Some critics of the cross-state rule say the absence of Luminant's units, along with other plant idlings predicted by ERCOT and unexpected shutdowns caused by extreme weather, could mean blackouts next summer.

“You shut down even just a couple of plants and that'll be a reality, not a theory, next summer,” said Rep. Michael Burgess, R-Lewisville.

ERCOT came close to ordering rolling blackouts during last summer's record heat and drought.

Trip Doggett, president of ERCOT, said in a phone interview that if Luminant weren't idling nearly 1,200 megawatts, the grid operator would meet its desired power-reserves.

But he noted Luminant's units aren't the only ones affecting reserves. Others will be mothballed for various reasons and new units delayed.

Still, Doggett said ERCOT wouldn't ask Luminant to restart its units for reliability purposes. “We don't believe we can put them in the position of breaking the law,” Doggett said.

The EPA and some analysts say Luminant could switch fuels, boost pollution controls or buy emissions allowances rather than closing plants to comply with the rule.

The concerns over EPA rules come during a broader debate in Texas over how to ensure there's enough power supply to meet demand as air conditioners fight summer heat.

Some stakeholders have suggested market tweaks to boost supply and energy-efficiency improvements to cut demand.

Colin Meehan of the Environmental Defense Fund argued in a blog post that EPA regulations aren't the problem, but that “market failures” have discouraged power companies from building more plants.

Texas could boost energy efficiency to cut demand and use technologies that reduce the amount of water used to cool power plants, he said.

Texas uses an “energy-only” market, in which power producers are deregulated and their prices are set mostly by market conditions. Much of the rest of the U.S. uses a “capacity market,” in which generators get a flat fee over their costs in exchange for maintaining prescribed capacity.

PUC Chairwoman Donna Nelson called the energy-only option “the envy of the world.” Although generators benefit from extra fees in a capacity market, consumers absorb them in their power bills, said Terry Hadley, a PUC spokesman.

Instead, the PUC and ERCOT are considering market tweaks to make more power available when it's needed the most.

One proposal would raise the payment that generators get for supplying additional power after demand reaches a specified point. Another would make it possible for some reserve power to go online more quickly.

The PUC and ERCOT also have identified some mothballed units that could come back with one- to three-months' notice.